Loss of telomeric DNA during cell proliferation may play a role in ageing and cancer. Since telomeres permit complete replication of eukaryotic chromosomes and protect their ends from recombination, we have measured telomere length, telomerase activity and chromosome rearrangements in human cells before and after transformation with SV40 or Ad5. In all mortal populations, telomeres shortened by approximately 65 bp/generation during the lifespan of the cultures. When transformed cells reached crisis, the length of the telomeric TTAGGG repeats was only approximately 1.5 kbp and many dicentric chromosomes were observed. In immortal cells, telomere length and frequency of dicentric chromosomes stabilized after crisis. Telomerase activity was not detectable in control or extended lifespan populations but was present in immortal populations. These results suggest that chromosomes with short (TTAGGG)n tracts are recombinogenic, critically shortened telomeres may be incompatible with cell proliferation and stabilization of telomere length by telomerase may be required for immortalization.